Increase of the authorized capital
A public company has the right to increase its authorized capital by issuing additional shares for at least the amount of net profit actually used for accumulation purposes for the reporting fiscal year. Additional shares as well as shares redeemed from shareholders are distributed among all eligible employees of the national enterprise in proportion to their remuneration for the reported fiscal year.
This rule applies to newly recruited workers if they have worked at the enterprise for a period established by the charter, after which the employee may be endowed with shares of the national enterprise (not less than three and not more than 24 months).
Shares during the creation of the NP and the formation of the authorized capital, as well as in the process of the enterprise's activity may pass from one owner to another due to (see scheme 3.2):
o exchange of shares of the converted commercial organization for shares of the national enterprise (item 1 of article 3)
o redistribution of shares to employees of the national enterprise in the event that the ratio of the number of shares between internal and external shareholders does not comply with the law of the People's Enterprises (paragraph 2, 5 article 4)
o the redemption of the surplus of its shares from employees that may have occurred as a result of the establishment of the maximum share of shares of one employee-shareholder (item 6, Article 4, item 1, Art. 6);
o purchase of additional and redeemed NP shares by employees-shareholders (and 2 items 5);
o Acquisition of additional and redeemed NP shares by newly accepted employees (item 3 of article 5);
o the redemption from shareholders of the surplus (in excess of the share established by the charter) of shares resulting from the provision of shares (paragraph 1 of Article 6);
o sale (redemption) of shares by a shareholder employee (item 2.3 of article 6);
o the sale (redemption) of shares by the retired employee (item 4, 5 article 6);
o the sale of shares by external shareholders (paragraph 9 of Article 6);
o redemption by the people's enterprise of shares at the request of external shareholders (Article 75 of the JSC Law).
Unlike closed and open joint-stock companies, dividends on shares of a national enterprise are paid no more than once a year.
This restriction in the payment of dividends seems to be caused by the desire to ensure self-financing of investments in the development of production in the conditions of a limited percentage of shares held by external shareholders (physical and (or) legal entities) and issuing only ordinary shares by the national enterprise. Dividends are not paid, if:
o at the time of dividend payment, the national enterprise meets the signs of insolvency (bankruptcy) or the indicated signs may appear as a result of dividend payment;
o the value of NP's net assets is less than the amount of its authorized capital and reserve fund or becomes less than such amount as a result of dividend payment;
o it did not buy back from its shareholders the excess of shares (in excess of the maximum share).
Protecting shareholder rights
The Law on National Enterprises establishes the following measures to protect the rights of shareholders:
1. The agreement on the establishment of a national enterprise is signed by all persons who have decided to become shareholders of this national enterprise. As it was mentioned above, in this contract: the share of shares of the national enterprise that can be owned at the time of its creation by each employee and each participant of the commercial organization being transformed, as well as each individual who is not a member of this organization, and (or) a legal entity ; the monetary estimation of shares (shares, shares) of the transformed commercial organization is established; conditions, terms and procedure for the purchase by a people's enterprise of shares from its shareholders are established; forms of payment for NP shares and procedure for the exchange of shares of a commercial organization for shares of a national enterprise are indicated.
2. It establishes the proportionality of the shares of the shares of the national enterprise, which the employee may own at the time of the establishment of the enterprise, the share of payment of this worker's labor in the total amount of remuneration for all employees. This measure is designed to ensure social justice in the distribution of shares between employees of the NP. The agreement on the establishment of a national enterprise, i.e. with the consent of all shareholders, may establish a different procedure for determining the proportion of shares of each employee-shareholder.
3. Limitation of the maximum shareholding, which can be owned by an employee of a national enterprise, is five percent. This restriction is important because the distribution of shares among shareholders in proportion to the payment of their labor does not always objectively reflect the employee's contribution to the final results of the company's operations.
4. The approval of the procedure for determining the amount of remuneration for employees of the people's enterprise and vesting their shares in the competence of the general meeting of shareholders. The decision is made on the principle of & quot; one shareholder - one vote & quot;.
5. In accordance with Art. 395 of the US Civil Code establishes the responsibility of the people's enterprise for monetary obligations arising from the rules for redemption of shares specified in the People's Enterprises Act. This article provides for the payment of interest for the use of other people's money in the amount of the discount rate of bank interest. At the same time, if the shareholder's losses exceed the amount of interest, he has the right to demand compensation from the people's enterprise for losses exceeding that amount.
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